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How Tom Steyer went from finance to running against 'the corporate stranglehold'

Ben Werschkul
DC Producer

Tom Steyer made billions of dollars on his ability to understand how corporations work.

From 1986 until 2012, he founded and ran Farallon Capital Management. His hedge fund managed money for “institutions, including college endowments, charitable foundations and pension plans, and for high net worth individuals.” The company made Steyer a billionaire, and continues to operate today.

In a 2017 interview with Forbes, Steyer gave some insight into what drew him into the investing field in the first place—and it wasn’t politics.

“I’m really fascinated with systems and how they work and also I love doing puzzles,” he said at the time. “Investing to a large extent is trying to look forward” which he said is “relaxing and exciting at the same time.”

Steyer left the company in 2012 to focus full-time on progressive causes. His move into politics led him to a presidential campaign where he is now preparing to appear on the debate stage in October alongside his fellow candidates for the first time.

The former investor has spent millions of his own dollars to jumpstart his presidential candidacy, but has had trouble breaking through in the crowded Democratic field. Nationally, Steyer remains below 1% in the polls, according to the Real Clear Politics polling average — but his numbers are considerably higher in the early primary states, thanks to heavy advertising spending.

His campaign has qualified for the Oct. 15 debate — giving him much needed exposure — but the requirements will become more arduous for the November debate and beyond.

Democratic presidential candidate and billionaire hedge fund manager Tom Steyer campaigns in Iowa in September. (Photo by Joshua Lott/Getty Images)

“Break the corporate stranglehold”

Steyer recently sat down with Rick Newman for Yahoo Finance’s Meet the Candidate series. When the subject turned to corporate influence, Steyer revealed that his perspective on the corporate world has changed dramatically from 2017.

"I am saying to you here right now. Break the corporate stranglehold. They've bought the government," he said in the interview.

In fact, he’s made his efforts to curb corporate influence as one of his campaign’s preeminent issues (alongside climate change). He argues that restraining corporate influence must come before things like health care, or education reform, or even raising the minimum wage.

"I think it's really important to tell the American people, actually, in order to get any of those things to happen, we're going to have to break the corporate stranglehold on our government," he told Yahoo Finance.

To solve the problem, Steyer proposes a series of measures from reforming the Federal Election Commission (FEC), to term limits for members of Congress, and instituting national referendums.

Perhaps the most far-reaching (and difficult to enact) proposal would reverse Supreme Court's decision in the 2010 case of Citizens United v. Federal Election Commission, which ruled that campaign spending is a form free speech. The decision is often cited by critics as having unleashed a wave of unrestrained corporate money into the electoral process.

"I know the Supreme Court said it's true, that corporations are people. But we all know corporations aren't people," the billionaire said.

Steyer traces his change to the tax cuts signed into law by President Trump at the end of 2017. “That tax plan proved to me that the corporations are running America,” he said. “It was just such a gift to them at the expense of American people. It's just not right.”

Steyer’s message and the 2020 field

Steyer isn’t the only Democratic candidate with an antipathy towards the corporate world. Vermont Senator Bernie Sanders released a plan on Monday that takes aim at sky-high CEO pay, saying it was “time to send a message to corporate America.” Separately, Massachusetts Senator Elizabeth Warren has a plan to “take power away from the wealthy and the well-connected in Washington.”

What distinguishes Steyer is his long background in the finance world.

In his 2017 Forbes interview, the billionaire discussed his realization of the limitations viewing the world purely through an investing lens.

“The issue with it is you are looking at a specific problem,” he said. “I realized, ‘wow, I’ve been super lucky,’ I love doing this, I’ve had a great career but there are opportunities that we are missing [in the larger society] that are gigantic.”

Ben Werschkul is a producer for Yahoo Finance in Washington, DC.

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